Katz, 36, who serves in the senior management of the IAI and has been a member of its powerful workers’ union for four years, was arrested on suspicion of coercing employees into joining the Likud party, police told the court in a hearing to extend his remand.

The court ordered Katz be held in custody for a further five days, along with fellow IAI worker’s union member David Peretz. The two were arrested early in the morning after their homes were raided and searched, police said.

Channel 2 news reported that his father may soon be questioned as a suspect in the affair.

Another 10 people were hauled in for questioning and later released, police spokeswoman Luba Samri said in a statement.

Yair Katz, son of Welfare Minister Haim Katz (Likud), at a remand hearing at the Rishon Lezion Magistrate’s Court, March 22, 2017. (Flash90)

Suspicions of corruption, fraud and breach of trust surrounding IAI became public last week when police raided the defense contractor, arresting 14 people.

Wednesday’s court hearing confirmed for the first time reports that police were looking into allegations that employees at IAI who refused to register as members of the Likud party may have been systematically denied promotions or raises in salary, and in some cases were even fired.

Channel 2 news reported last week that Haim Katz, who served as head of the IAI workers’ committee for over two decades before becoming a minister some two years ago, had been mentioned by some workers in testimony to police.

In a Saturday statement, Haim Katz said no such corrupt practices went on under his watch, and that there was a “witch-hunt” under way to harm his reputation. A spokesman for Katz declined a Times of Israel request to comment on the arrest of his son Wednesday.

Social Affairs Minister Haim Katz attends a Labor and Welfare committee meeting in the Knesset, June 8, 2015. (Alster/Flash90)

The suspects were from IAI and private companies that either supplied or were supplied by IAI, along with former Israel Defense Forces general Amal Asad.

“This is an extensive investigation, with a wide scope, which includes a number of sub-scandals, and raises suspicions of a range of charges — corruption, aggravated fraud, money laundering, theft by public officials, illegal business practices, fraud and breach of trust,” police said in a statement last week.

Those allegedly involved in the criminal activities include board members and managers, as well as junior staff, and “those who are supposed to be gatekeepers and advisers,” police said.

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